Politics & Policy

Nancy Pelosi's Business Brain Trust

In two weeks, Nancy Pelosi and her husband, Paul, will host a two-day retreat at a Mediterranean-style inn in Napa Valley, just down the street from the legendary French Laundry restaurant. The guests, as in years past, will include some of her biggest benefactors and some of the most prominent names in corporate California; often they are one and the same.

Financier Bill Hambrecht, who helped Apple (AAPL) and Google (GOOG) go public, usually attends the annual conference, as do Charles Geschke, the co-founder of Adobe Systems (ADBE), and California commercial real estate developer George Marcus. The retreat is part thank-you, part intellectual gabfest. Last year's theme was the economy; guests were briefed by White House adviser David Axelrod.

Opponents have long called Pelosi "bad for business," but she's not the anti-business ideologue of the typical Republican caricature. She regularly seeks out corporate leaders for their take on the economy and talks frequently with Bay Area business titans like Google CEO Eric Schmidt. Her brain trust includes numerous chief executives and venture capitalists. "I have found her to be supportive of Silicon Valley and the entire technology industry and always open to a healthy give-and-take on key issues," says Cisco Systems (CSCO) CEO John Chambers, who helped Pelosi develop an innovation agenda in 2005 that included a permanent R&D tax credit, education funding, and universal broadband access.

Many of these unofficial advisers are her biggest donors, and the policies she advocates often benefit their industries. To hear Pelosi, 70, tell it, she's sowing the seeds of an economic revival that wouldn't be possible without a big nudge from the government. Her state's high-tech and clean-energy industries could benefit from that push, as could the rest of America, she argues. "We don't have any choice. We have to compete," Pelosi said in a July 14 interview with Bloomberg Businessweek. "These other countries have made their decision," she said, referring to China and Europe, where governments have plowed billions into renewable fuels like wind and solar. "We had an Industrial Revolution, we had the Technological Revolution, and the Green Revolution," Pelosi said. "Are we going to check out of this? I don't think so."

Pelosi supports higher taxes for the wealthy and government competition in health care to lower costs to consumers. She tried and failed to charge financial firms for the Wall Street overhaul. These positions have made her a favorite target of Republicans, who say she costs the economy jobs. They argue that she picks winners and losers by heaping new regulations on existing industries while setting aside taxpayer funds for chosen sectors such as renewable energy and biotech. "Her agenda has added 500,000 government jobs and lost 2.5 million free-enterprise-sector jobs," says Representative Pete Sessions (R-Tex.), who chairs the House Republicans' campaign committee.

Judging by the legislation she's gotten through with few, if any, Republican votes, Pelosi has had much success as a speaker. Some Democrats facing tough reelection contests in November say she is, perhaps, too successful. Last year, when vulnerable members balked at voting to cap carbon emissions, she and the Administration said Senate Democrats would follow the House's lead, allowing lawmakers to boast they had slowed global warming and reduced dependence on foreign oil. The Senate never voted, and some House Democrats are unhappy that they must defend a vote that their GOP challengers say would have raised homeowners' energy bills.

If you listen to her long enough, Pelosi begins to sound like the venture capitalists in her circle, which includes Silicon Valley pioneers such as Hambrecht and John Doerr of Kleiner Perkins Caufield & Byers. He and Cisco's Chambers are not among her donors.

There are even some Republicans in her network. Vinod Khosla, the co-founder of Sun Microsystems, says she invited him to breakfast in 2005 after both spoke at a forum in Fremont, Calif. She wanted to pick his brain about renewable energy and innovation. "She didn't worry that I was a Republican," Khosla says. "She is very open-minded. That impressed me." The two have been close since.

Such relationships have an obvious benefit for Pelosi, who raises millions from her corporate confidants. In the years since Khosla first had breakfast with Pelosi, he and his wife have given her and the Democratic Congressional Campaign Committee nearly $170,000. Her donors' companies often benefit from Pelosi's advocacy for research tax credits, visas for engineers, and government funding for clean-energy startups. Stion, a maker of thin photovoltaic solar cells and backed by Khosla, received $37.5 million in tax credits through last year's economic stimulus measure.

Pelosi is not shy about asking the tech community for help in return. "They want H-1B visas for immigration, and we're saying 'help us have a comprehensive immigration reform and we can help you with that,'" Pelosi said in the interview. "But we've got to do things together."